#HedgeFundsCMEBitcoinNetShortsFall89%
Net short positions held by hedge funds in Chicago Mercantile Exchange (CME) Bitcoin futures have plunged by 89%, marking a structural turning point in the institutional market. The decline is mainly due to the widespread unwinding of the popular basis trade (arbitrage between the spot and futures markets), a strategy that became less attractive as the annualized premium on CME contracts fell following the stabilization of spot ETF flows. As profit margins on this market-neutral trade narrowed, institutional firms quickly closed their bearish hedges, removing one of the main sources of selling pressure in regulated derivatives.
Net short positions held by hedge funds in Chicago Mercantile Exchange (CME) Bitcoin futures have plunged by 89%, marking a structural turning point in the institutional market. The decline is mainly due to the widespread unwinding of the popular basis trade (arbitrage between the spot and futures markets), a strategy that became less attractive as the annualized premium on CME contracts fell following the stabilization of spot ETF flows. As profit margins on this market-neutral trade narrowed, institutional firms quickly closed their bearish hedges, removing one of the main sources of selling pressure in regulated derivatives.
